Trulia.com shares hidden costs of renting to help you make a more educated decision.
1. Opportunity Costs
When you rent, you lose out on the chance of equity – which can mean an increase in your home’s value. Plus, even in a down market, it can also mean never having the chance of owning the place you live free and clear.
2. Income taxes
If you earn above a certain salary, the income taxes you’re paying as a renter will be substantially higher than if you owned a home and could deduct your property taxes and mortgage interest.
It’s not uncommon for tenants with small apartments to also pay for storage space, without calculating that expense into their “housing” budget.
4. Costs of improving the property
Long-term renters may paint, replace the flooring, and do other improvements to make the place livable. But since it’s not technically “their” home, when they do move out, all the cash they invested is lost. In fact, some landlords may require them the pay or forfeit deposit money to bring the place back to its original, neutral décor.
5. Lost deposits
Anyone who has rented more than a couple of apartments is well aware of the chances of losing some or all of your security deposit, no matter how well you care for your home.